After the PMB decision to approve projects for financing from the Fund, the DBSA will inform the beneficiary, within 14 days of the decision and commission the process to enter into the relevant contractual arrangements for the financing agreements.
The FMU shall be responsible for the development and conclusion of financing agreements with the project Sponsor and the respective Implementing Agent.
Sponsors for water projects in SADC are usually the Government(s) of the country (ies) where the project is located.
Once the Financing Agreement is concluded, the DBSA will dispatch the Contract in three originals to the beneficiary.
The FMU shall inform the SADC Secretariat in writing about each contract that is delivered.
The grant beneficiary shall have 45 calendar days to deliver to the DBSA the countersigned contract.
Failure to comply with this provision may result in the cancellation of the offer.
Grant Implementation and procurement
The Grant shall enter into force on the date of counter signature by the Grant beneficiary.
The maximum amount of the Grant will be stipulated in the contract.
Any amendment to the contract must be set out in a written addendum to the original contract.
Minor amendments may be notified to the FMU and DBSA provided they comply with the following:
They do not affect the basic purpose of the project; and
The financial impact is limited to a transfer between the main budget headings involving a variation of less than 20% of the original amount. The total grant amount, however, shall not be increased.
With respect to procurement, the tendering and contracting procedures for each regional investment project shall be guided by the KfW procurement guidelines, which are in line to international procurement guidelines.
Disbursements and Suspension of Disbursements
The FMU shall make payments directly to the service providers on eligible expenditure as per contractual milestones.
For service contracts that provide for advance payments, such payments shall only be made upon the service providers complying with the accompanying conditions on providing guarantees, which shall be provided for in the service contracts.
A time limit for first disbursement shall be set in all service contracts.
As a guide rule, this period should not exceed 18 months. Failure to comply with stipulated time limits for disbursements shall result in cancellation of the Grant Agreement.
Disbursement of the Fund resources may be suspended if the PMB, on recommendation from the FMU, are of the opinion that the withdrawn amounts are not being used for or complying with the agreed purpose.
In such a case, the FMU shall thereafter take necessary measures to recover misused funds from the beneficiary.